Reply to SVB Bank Run: Fed Calling Emergency Meeting

Forum Index » Political Discussion

Reply to "SVB Bank Run: Fed Calling Emergency Meeting "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Jesus, they're predicting bank runs on Monday.  What is this, 1929?

Hold on to your butts folks.  This could get ugly quick.  What company in their right mind who does business with smaller/regional banks would keep funds over $250k in them now that they're watching SVB fail?  It is scary to think how this could spread and cause a nation wide bank run.[/quote]

[b]That’s why depositors need to be made whole.[/b] It’s fine if equity holders in SVB lose out. But if people don’t have faith in smaller banks, this could spiral out of control extremely quickly. [/quote]

No - they do not need to be 'made whole'.  They were aware of FDIC when they opened their accounts (and were able to buy insurance for deposits that exceeded FDIC limits if they chose to do so.

If you think that depositors in any bank need to be 'made whole' if the bank collapses then we are into a completely different regulatory scenario.

If the feds are required to make depositors 'whole' if their bank collapses - then we really don't need private banks at all.  Instead, the feds can just turn itself into a public-offering bank, accept all deposits and the associated liability.

Sorry but 'private banks accept the deposits + the profits, the feds pay back when that fails" isn't actually a thing.

[/quote]

If the depositors aren’t made whole, by St. Patrick’s Day most small banks in the US will be under siege and we will be in 1929 territory. We cannot have a banking system where any holdings over $250k in a bank is considered a risky investment. People are already pulling money out of the smaller banks. If there is a loss of faith in ALL smaller banks then the entire system collapses catastrophically.

[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics